The One Big Real Estate Trend You Need to Understand in 2017

Forget a tale of two cities: Extreme housing market fragmentation is now creating different experiences for home buyers and sellers in a wide range of locations and segments.

Nationally, home prices are expected to keep rising, albeit more slowly— 3.5% in 2017, vs. 4.5% in 2016, per Moody’s Analytics projections. But even more so than in recent years, your position is now going to hinge on what and where you’re buying or selling.

Hoping to escape a downtown condo for the suburbs? Your equity should go far: Small homes have seen much sharper price growth than larger ones, urban areas have appreciated faster than metro outskirts— and both trends are expected to continue in 2017.

If you’re in the reverse position, though, brace yourself: Inventory has tumbled among less expensive homes, and your money may not buy as much as you expect. Here are your best moves now:

Growing Families, Make Your Move

If you’re looking to trade up to a larger home, you’re in the housing market’s sweet spot, and the first part of 2017 should be a particularly good time to strike. Over the five years between 2011 and 2016, the average price on a two-bedroom house climbed 59% nationwide, while four-bedroom houses rose a more modest 41%, according to an analysis by Attom Data Solutions. Inventory has also risen at the higher end of the market, climbing almost 8% for homes in the $500,000 to $750,000 range.

Because you’re well positioned as a seller, and you want to walk away with as much money as possible for your next down payment, choose a higher offer over a speedier close, suggests Lawrence Yun, chief economist at the National Association of Realtors.

Aiming Small? Be Flexible

If you’re hoping to cash out and scale back—or if you’re a first-timer looking for a starter home—you face a tight market with low supply and greater competition from rival buyers. Yet the more flexible you are, the more choices you’ll have.

Willing to move farther from the city center, for instance? The average price per square foot in overall metro areas has risen 52% over the past five years, according to Redfin, but it has jumped 76% in the urban cores.

And while no one wants to tackle a major overhaul, buyers who are willing to make at least some upgrades can get a better deal, notes Svenja Gudell, Zillow’s chief economist. You won’t be alone: More than half of home owners who bought in the past year got a place that needed at least some updates, according to a recent Zillow survey.

Meanwhile, retirees looking to move to sunnier climes can profit from what are now bigger variations between U.S. metro areas than have existed at any time in the past two decades, Yun says. He singled out Greensboro, N.C., where home prices have slipped 0.3% over the past year, as a possible retirement destination.

Lock In a Lower Loan Rate

If you’re ready to buy, now is a good time to pull the trigger on financing, since the record-low mortgage rates seen in 2016 aren’t expected to last. Average rates could rise as much as half a percent in the next year, according to Dan Smith, president of Atlanta-based PrivatePlus Mortgage. That would mean an $864 increase in annual payments on a $250,000 mortgage if rates jump to 4.2% from the 3.7% average on 30-year fixed loans in November.

China’s Property Boom Continues as Prices Rise at Record Rate

China’s new home prices rose in September at the fastest rate on record as buyers rushed to close contracts before new restrictive measures took effect in October.

The boom in sales and prices was evident in mortgage lending, with new housing loans to individuals totaling 475.9 billion yuan in September alone, some 76% higher than the same month last year, central bank official Ruan Jianhong said in a news release.

Prices in China’s 70 major cities rose 11.2% in September from a year earlier, accelerating from a 9.2% increase in August, as 64 of them saw year-on-year price gains, a National Bureau of Statistics survey showed on Friday.

September’s national price growth was the fastest since the series was started in 2011.

The property market, accounting for around 15% of gross domestic product, contributed handsomely to third quarter economic expansion of 6.7%.

Hefei, capital city of Anhui province in central China, was the top performer, with prices surging 46.8% from a year earlier, quicker than its 40.3% rise in August.

The coastal city of Xiamen in southeastern China, the top performer in August, came in second with a price rise of 46.5%, accelerating from 43.8% in the previous month.

Beijing and Shanghai prices rose 27.8% and 32.7% on-year, quickening from 23.5% and 31.2% in August. Price growth in Shenzhen, a long-time top performer that gave way to Xiamen to be the second highest in August, fell slightly to 34.1% from 36.8% last month.

The house-prices-to-household-disposable-income ratio in first-tier cities has risen to be around 18 to 20 times in this year’s housing fever, putting housing affordability close to Hong Kong’s and making it less affordable than London, UBS wrote in a report, citing notoriously expensive cities.

COOLING DOWN A RED-HOT MARKET

More than 20 cities have now adopted restrictive measures aiming to tame fast-rising prices, although 15 cities had implemented them in the first week of October.

“Out of the 15 cities, probably half of them put out effective measures, such as raising the down payment ratio for second-home purchases to as high as 70 percent,” Beijing-based Rosealea Yao of Gavekal Dragonomics said.

“But the rest of the cities are probably just going with the flow, as their measures are more half-hearted.”

Yao said aggressive credit tightening, which is regarded as most effective in curbing prices, seems unlikely as the government looks to stimulate economic growth.

But despite clear signs of destocking in some lower-tier cities as sales boom and new construction slips, many small centers still have a large glut of unsold homes.

“The property boom has been a very good thing for destocking, but that doesn’t mean the government can just sit back and relax now,” she said.

For more on property, watch Fortune’s video:

To “reflect changes in the market” and prove the effectiveness of official cooling measures, the NBS rushed in a new table on Friday, which compared price growth in the first half of October to September.

It showed price growth in 15 first- and second-tier cities which implemented new measures during the holiday, including Beijing, Tianjin, Shanghai and Shenzhen, showed signs of cooling on a monthly basis.

This early indication concurs with some analysts who are optimistic about China’s efforts to manage over-investment in property.

“We view China’s authorities as more like Singapore’s and we think it’s a matter of time before macro prudential policy slows sales growth,” Singapore-based Tim Condon of ING said in a note ahead of the data release.

Four Chinese cities have announced new restrictions on property purchases as the government tries to cool soaring home prices stoked by property speculators in second- and third-tier cities across the country.

The measures in Chengdu, Jinan, Wuhan, and Zhengzhou were the latest in a string of steps to tighten credit flowing into the property sector as the government tries to balance the need to prevent bubbles while stimulating economic growth.

The spate of tightening measures over the past two weeks “shows that China‘s top level may have reached consensus that the concerns about overheating in property market may have overshadowed the concerns about the economic slowdown,” OCBC said in a research note on Monday.

“The shift of policy tone also shows that China is unlikely to stimulate the economy further aggressively. This may not bode well for market sentiment in the longer run,” it said.

Many mid-tier Chinese cities have become targets of property speculators looking for the next big thing beyond China‘s major cities. Other cities such as Tianjin, Hefei and Suzhou have also recently rolled out counter-measures to limit purchases as home prices jump.

The average new home price in 70 major cities climbed an annual 9.2% in August, up from 7.9% in July, according to data from China‘s National Bureau of Statistics.

Residents of the inland city of Zhengzhou who already own two properties and non-residents who own one will now only be able to buy homes larger than 180 square meters (1,938 square feet), according to a notice posted on the local government’s website late on Saturday.

In Chengdu, the capital of southwest Sichuan province, prospective buyers will only be allowed to purchase one property in certain city districts, and those buying their second property will need to place a down payment of no less than 40% of the purchase price, the local government said.

The Chengdu government also said it would penalize developers who were sitting on land without starting construction on time as promised and would clamp down on rumor mongering in the property market.

The eastern city of Jinan said on Sunday that residents who already owned three properties could not buy more and increased down payment requirements for those buying their first home to 30% from 20%, among other measures detailed in a document on the government’s website.

Pictures of hopeful home buyers queuing up in Jinan to obtain spots in a lottery-like registry system during the public holiday weekend was widely published in state media before the new restrictions were published.

For more on the housing market, watch Fortune’s video:

Residents of certain parts of the city of Wuhan, in the central province of Hubei, would be required from Monday to make a minimum down payment of 50% to qualify for a commercial loan to buy a second home or 25% for a first home, according to an announcement on a city government website. No loans would be given to residents for third homes.

Non-residents of Wuhan were ineligible for commercial loans for second homes in parts of the city and barred from buying third homes, it said.

Home prices in at least one district in Zhengzhou, which became a symbol of China‘s property excesses because of rows of empty housing developments, have risen two-thirds this year to 25,000 yuan ($3,747.56) per square meter on average, a sales manager told Reuters on a recent visit to the city.

Here’s Where Chinese Home Prices Spiked the Most in August

China’s home prices rose at a faster pace in August, suggesting that tightening measures imposed by a growing number of cities on overheated markets have yet to show significant effects.

A robust recovery in home prices and sales, thanks to a flurry of government stimulus measures, gave a stronger-than-expected boost to the world’s second largest economy this year, but eye-popping home price rises in bigger cities have raised fears of overheating.

Average new home prices in 70 major cities climbed 9.2% last month from a year ago, accelerating from July’s 7.9% rise, according to Reuters calculations based on data from the National Statistics Bureau (NBS) on Monday.

The NBS data showed 64 of 70 major cities tracked by the NBS saw year-on-year price gains, up from 51 in July.

Prices in second- and third-tier cities are rising at an alarmingly sharp rate, and speculation was rising that more cities would impose more stringent controls to discourage overeating.

The coastal city of Xiamen outperformed long-time top performer Shenzhen and had the sharpest price spike, with prices surging 43.8% from a year earlier, faster than the 39.2% rise in July.

The inland city of Hefei was the second-fastest growing market according to the survey, with prices rising an annual 40.3% in August, versus a 33.8% gain in July.

With the buying frenzy spilling over from first-tier cities to other parts of the country, more affluent second- and third-tier cities such as Xiamen, Nanjing and Wuhan have stepped up restrictive measures, hoping to deter speculators and cool prices.

Housing authorities from the eastern city of Hangzhou announced on Sunday that it will begin to restrict home purchases as of Sept. 19. Families who are not registered as residents and already own one or more houses in certain districts cannot purchase another home, either new or pre-owned.

Prices in the southern boomtown Shenzhen rose 36.8% from a year ago, slowing from 40.9% in July. Shanghai and Beijing prices rose 31.2% and 23.5% on-year, quickening from 27.3% and 20.7% in July. Month-on-month gains rose to 3.6% and 3.5% from 1.2% and 1.5% in July.

First-tier cities such as Shenzhen and Shanghai have tightened downpayment requirements for second homes and raised the eligibility bar for non-residents to purchase properties.

For more on China, watch Fortune’s video:

Despite signs of a broadening recovery, many small cities still have a large glut of unsold homes. Prices in the rustbelt city Dandong recorded the biggest fall at 2.1%, compared with 2.4% in July.

Official data showed that mortgage loans remained the major driver of China’s overall loan growth, accounting for more than 70% of bank loans in August. The rapid rise in property loans over the past few months has been a notable cause of concern among analysts.

Investment growth in Chinese real estate picked up in August on a yearly basis following a gradual decline since April, suggesting that investors are still optimistic of a booming property market.

Here’s How Much the White House Would Cost if It Ever Went Up for Sale

President Barack Obama and his family will be moving out of the White House in a few months. But as far as we know, they aren’t looking to sell. Of course, it’s not in any president’s power to actually sell the White House, and it’s unimaginable that the historic home will ever be sold.

But what if it did? How much would 1600 Pennsylvania Avenue fetch on the market?

Barrons wanted to find out, and Ann Gray, of the Los Angeles–based Gray Real Estate Advisors, estimates that $90 million would be a fair price for the president’s residence. The ballpark figure came after the realtor incorporated factors such as the cost of construction ($232,000 in the 1790s, or about $100 million today), potential rental operating income from the home’s 16 bedrooms ($5 million a year), and the market price for comparable properties (Donald Trump’s 17-acre Mar-a-Lago Club in Palm Beach is valued at $100 million).

Some real-estate pros think $90 million underestimates the White House’s real value. “I think $90 million seems on the low side,” Florida Realtor Cara Ameer explained on Realtor.com, after researching her own set of comparable properties, including the Hugh Hefner’s Playboy Mansion, which was originally listed for $200 million and sold for $100 million. “If you look at several significant properties that have been on the market across the country, you can get an idea of value [for the White House] that is north of $100 million.”

Everyone agrees that if all of the artwork, historic artifacts, and American memorabilia were included in the sale, the asking price would soar—to upwards of $250 million, according to Gray.

According to Zillow, even that’s a huge underestimate. The website, which gives estimates for real estate all over the country, says that 1600 Pennsylvania Avenue in Washington, D.C., is worth roughly $389 million. The site notes, though, that the property is “off market” as of now.

Homeownership Increasingly Difficult For Average Americans

(Reuters) – Home prices are rising faster than wages in most of the United States, making homeownership increasingly difficult for average Americans in some of the most populous areas of the country, according to a report released on Thursday.

The report found that home price growth exceeded wage growth in nearly two thirds of the nation’s housing markets so far this year, with urban centers like San Francisco and New York City among the least affordable.

Home prices in 9% of the U.S. housing market are now less affordable than their historic norms, the report by RealtyTrac found. Home buyers need to spend more of their incomes on housing, leaving less money for other purchases.

“While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets,” said Daren Blomquist, senior vice president at RealtyTrac, which monitors housing market trends.

RealtyTrac parsed homes sales and income data in 456 U.S. counties with a combined population of 221 million.

The report comes after data showing house flipping, buying and selling a house to make a quick profit in a hot housing market, had risen to record levels in some markets, generating concerns of a price bubble.

While the latest report could fuel those concerns, prices are still far more affordable than during the peak of the housing bubble in 2006. In the first quarter of this year the average wage earner needed to spend a third of their income on monthly mortgage payments compared to more than half in 2006.

In addition, RealtyTrac’s affordability measure, which compares house prices to wages, was above historic norms in 99% of housing markets in 2006. After the housing bubble burst that fell to a low of 2% in 2012 before rising to its current 9%.

For example, to buy a median priced home in various areas of New York City, Brooklyn and Manhattan especially, or in the San Francisco metro area, a buyer needs to spend between 120% and 95% of the average wage on mortgage payments.

Among populous areas where the growth in house prices outstripped wage growth were Los Angles, Phoenix, and San Diego.

Why It’s Better to Live Near a Target Than a Walmart

It’s widely known that location matters, especially when it comes to the value of your home. And the difference between living near a Target tgt vs. a Walmart wmt could be pretty substantial, according to a new report.

Online real estate information company RealtyTrac analyzed home values, appreciation, and property taxes in U.S. zip codes with a Walmart or a Target to determine which superstores give homeowners the biggest returns on their investments.

As it turns out, homeowners living near a Target saw the value of their homes rise higher since purchase. Among homeowners who sold in 2015, those with homes near a Target experienced an average 27% increase in home prices, which equals to an average gain of $65,569. That’s compared to a 16% increase, or $24,900, for homeowners near a Walmart.

Walmart responded to RealtyTrac’s report, saying “Not only are we serving customers with our stores, we’re positively impacting the communities our stores are located in, whether it’s increased property value or increased sales tax revenue.” A company spokesperson added, “In addition to this RealtyTrac study, a 2012 study published by the National Bureau of Economic Research showed that homes located within a half mile of a Walmart showed an increase in property value compared to homes that were not.”

It also costs homeowners more to live near a Target. Based on 2014 data, they pay higher property taxes—on average, $7,001 a year, or 123% more than the $3,146 a year for homeowners near a Walmart. They also pay more than the $4,283 average property tax bill nationwide.

What’s more, based on 2015 data, homeowners who live near a Target pay more for their homes—$307,286, or 72% more than the $178,249 average value for homes near a Walmart, and more than the average home value of $215,921 nationwide.

These 5 Cities Might Be the Next Housing Bubble

The US housing market has been booming. Last year saw the most new home construction since 2007, when the real estate bubble burst.

But in 2016, there is some uneasiness. New home construction took a small, 3.8% slip in January, due to the stock market uncertainty and wintry weather. According to an analysis of economic and housing data by Fitch Ratings, there are some areas in the U.S. where housing prices are getting way too high.

In some cities, housing stock is overvalued by as much as 23%, based on fundamentals such as consumer incomes, population numbers, mortgage rates, and rents, according to Fitch Ratings, one of the big three credit rating agencies in the U.S.

That begs question: Is there a bubble, and if so, where — and when — will it pop?

Although definitions of real estate bubbles vary, the underlying idea is that people buy property at inflated values and then are left holding the bag when prices drop. The result is at least a loss of equity and could even mean someone’s mortgage is now higher than the property’s value. In the peak market during the 2000s, Las Vegas was 48% overpriced, Riverside, California was 47%, and Ft. Lauderdale was 46%.

Fitch’s analysis suggests that now several housing markets have hit the troublesome 20% overvaluation point.

Remarkably, the most overvalued markets aren’t the usual suspects– San Francisco, New York, and Los Angeles. Prices in those cities keep going up, but incomes are relatively high there too. According to Fitch, San Francisco housing, for instance, is 16% overvalued, with prices up 10% just since last year.

Here are the 10 worst places to own a home

It’s been a great four years for homeowners, who have seen home values rise more than 30% since the beginning of 2012, according to the Case-Shiller 20-city composite index.

But beneath the numbers that describe a breathtaking rally in the value of the American home, there are dozens of markets that have been left behind. This is in part because real estate values fluctuate based on local trends, like the strength of the regional job market. But there are characteristics of this particular housing recovery that made it rough going for certain housing markets, like those with a higher concentration of what had been subprime borrowers during the mid-2000s real estate bubble.

Real-estate data firm Trulia dug into the housing numbers and compiled a list of the ten worst places to own a home since the start of the real estate recovery back in 2012. They looked at data like home values and vacancy rates in more than 350 metro areas across the United States. They combined that data with labor market indicators like wage growth, employment growth, and the change in the unemployment rate. The logic is that even if housing prices are rising, that might do a homeowner little long-term financial good if the area the home is in has little wage growth and lousy employment prospects.

According to these measurements, the following are the worst cities to have owned a home in the past four years:

In many ways, this list shows just how much the U.S. economy has improved over the past four years. Even in these cities, where home value appreciation and job growth were the worst in the country, home values in some of these cities actually appreciated, and employment growth in all of these cities was positive.

At the same time, relative to the country overall, these cities were not a great place to be a homeowner since 2012. Here’s what Trulia Data Analyst Felipe Chacon has to say about them:

Cities like Albuquerque, N.M.; Gary, Ind.; and Silver Spring, Md., were some of the worst places to own post-housing bottom. All of the cities on this list have performed below average on both labor market metrics and housing market metrics. In Albuquerque, for example, home of Sandia National Laboratory, Kirtland Air Force Base, and the University of New Mexico, the government sector comprises nearly 21% of all employment compared with 14% nationally. With tight state, local and federal budgets, a more robust employment expansion has been hampered since prior to 2012. In Gary, Ind., slow employment growth and net out migration during the past two years have kept home value appreciation to a minimum. Silver Spring on the other hand, has seen moderate price appreciation since 2012, but the vacancy rate has been climbing steadily and labor market improvements have been modest.

These Will Be the Hottest Real Estate Markets in 2016

We’re nearly a decade removed from the peak of the real estate bubble, and the U.S. housing market has finally returned to some semblance of normalcy.

If you take a look at the Case-Shiller home price index, you’ll see that for the past fifteen years, home prices nationally have either been rising at double digit rates, or falling precipitously. This is even more remarkable when you consider the fact that, over the long run, one can expect the value of residential real estate to appreciate only a bit faster than inflation.

In other words, these have been interesting times for anyone with wealth tied up in real estate, to say the least.

This is not to say that all the effects of the housing burst have dissipated. Some markets are being weighed down by an overabundance of underwater homes, while the financial toll the recession took on individuals, who suffered job losses and hits to their credit, has left a large share of Americans unable to finance the purchase of a new home.

Of course, there’s only so much one can say about the national real estate market, because the dynamics in every market differ. Economists expect much more modest home price appreciation of roughly 3% or so next year. But certain markets will outpace that rate.

Jonathan Smoke, Chief Economist with Realtor.com put forward his predictions for markets that “are poised for a for substantial growth in prices and sales” next year. He looked at which markets are seeing 60% more listing page views than the national average, and the inventory of which is moving 16 days faster than the national average, and found the following 10 markets can be expected to take off:

Providence-Warwick, RI-MA

St. Louis, MO-IL

San Diego-Carlsbad, CA

Sacramento-Roseville-Arden-Arcade, CA

Atlanta-Sandy Springs-Roswell, GA

New Orleans-Metairie, LA

Memphis, TN

Charlotte-Concord-Gastonia, NC-SC

Virginia Beach-Norfolk, Newport News, VA-NC

Boston-Cambridge-Newton, MA-NH

This is great news for anyone who owns property in these areas, but for prospective home buyers, there’s more to consider when choosing a city to live than whether other people are interested in buying homes there too. Trulia Housing Economist Ralph McLaughlin cast a wider net when deciding at which home markets interested him most. He looked at five metrics: strong job growth over the past year, low vacancy rates, high affordability, more inbound home searches than outbound, and a large share of millennials. He found the following markets to be poised for higher activity, and also good places to look to move:

Grand Rapids, MI-WY

Charleston, SC

Austin, TX

Baton Rouge,LA

San Antonio, TX

Colorado Springs, CO

Columbia, SC

Riverside–San Bernardino, CA

Las Vegas, NV

Tacoma, WA

Few of these cities are those we think of when we think hot real estate markets, like the San Francisco or Washington, D.C. metros. This underscores the growing problem of affordability in many cities where jobs are plentiful. At a certain point the affordability problem grows so bad that people are forced to leave the cities with the best job prospects and move to a place where they can afford to buy a home.

According to McLaughlin, that’s how a place like Grand Rapids, MI ends up on the list. It may not have the same night life as New York City or weather like San Diego, but it’s one of the most affordable cities in the country, while job growth there is the 14th strongest in the nation.